Detroit Bond Insurers, Creditors Seek Role in Valuing Art

By Steven Church -
Nov 26, 2013

Detroit’s creditors, including bond
insurers, asked the judge overseeing the city’s bankruptcy to
give them a role in valuing its art collection, an asset that
could be used to pay creditors owed $18 billion.

Bond insurers Financial Guaranty Insurance Co. and Syncora
Guarantee Inc. asked U.S. Bankruptcy Judge Steven Rhodes to
order Detroit to cooperate with a committee of creditors in
determining how much the collection is worth.

“The city must demonstrate that its plan maximizes the
value of the art to enhance creditor recoveries,” the creditors
said in a filing today in U.S. Bankruptcy Court in Detroit.
“The only way to prove this is to provide an assessment of the
art based on arms-length market transactions.”

Since the city filed the biggest U.S. municipal bankruptcy
case in July, creditors, including unions and retired city
workers, have pushed it to consider selling some of the
thousands of pieces held by the Detroit Institute of Arts.

The collection includes Diego Rivera’s two-story tall mural
from 1933 titled “Detroit Industry,” as well as pieces by
Edgar Degas, Pablo Picasso and Vincent van Gogh.

Kevyn Orr, the city’s emergency financial manager, hired
Christie’s Inc. to value the art. He hasn’t said whether the
city plans to sell any pieces to pay creditors.